Buyer reps concerned by ‘inappropriate’ insurer behaviour at renewal

Buyer representatives are concerned about “inappropriate” behaviour among insurers during renewals as market hardening accelerates, and urged them to change conduct to help clients cope with the tough environment. The commercial insurance market continues to harden at an increasingly quick pace. This is obviously causing problems for insureds, and it seems that some insurers are not operating as well as they could when it comes to renewals, often leaving changes too late in the day or being slow to respond. “What we have found so disappointing are stories about lateness of renewal terms, changes of renewal terms and resubmission of renewal terms. Renewals are becoming almost a permanent, all year round job. You can take all that time preparing and get closer and closer to renewal when people suddenly reset the boundaries, and you almost have to go back and start again. It doesn’t make sense. Some of the behaviour has been inappropriate in a market where all sides want to develop sustainable partnerships,” said Julia Graham, deputy CEO and technical director at Airmic. “The hard market is, and continues to be, a very big problem for buyers. I think brokers and insurers can help by refocussing on behaviour,” she added. Hugo Wegbrans, Aon’s global chief broking officer said a big concern is renewals “going to the wire and the market becoming unpredictable”. “We see insurers tending not to quote and just giving non-binding indications. Carriers are taking a lot of time to respond to answers and leaving clients waiting. This is not helpful. If things change at the last minute, risk managers can get into trouble. It can make the buyer look like they don’t know what they’re doing and unprofessional, when in fact the problems have been caused by the carrier. Buyers have to go back to their boards with last-minute changes or unexpected rises. This is what clients don’t like,” he said. Mr Wegbrans noted that much of these problems are being caused because the market is moving so quickly and decisions are increasingly being taken out of the hands of local underwriters in favour of regional or global chief underwriting officers. “So insurers need to address this issue and we are pushing carriers to bring their capacity to the clients a bit earlier. But clients also need to take decisions earlier,” said the broker. He added that Aon is working hard to deliver options for buyers and mitigate the impact of the hard market, but stressed things may get even more tricky as companies are hit by Covid-19 financial problems. “We are approaching the whole market for useful and acceptable capacity. We are very busy putting forward ways to adjust product, cut the cost of increases or increase retentions. Clients are certainly looking for alternatives – through higher retentions and the like,” said Mr Wegbrans. “But with some of the financial problems likely coming down the line for clients as government support in the EMEA region is turned off, things might become even more difficult. With carriers wanting more money and buyers wanting to pay less, it is going to take a lot of creativity to adapt the product to requirements going forward,” he added.

Buyer reps concerned by ‘inappropriate’ insurer behaviour at renewal

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